Temporary regimes of instantaneous depreciation (Law No. 21.256)
On September 2nd of this year, Law No. 21,256 came into force, establishing tax measures that are part of the emergency plan for economic and employment recovery in the country. This law established new instantaneous depreciation alternatives for goods acquired between October 1st, 2019 and December 31st, 2022, thus modifying the current instantaneous depreciation regime of Law No. 21,210 (Tax Modernization).
Based on the above, those taxpayers who declare the First Category Tax of Income Tax Law determining their taxable income through accounting records will be able to opt from the following instantaneous depreciation regimes:
- Physical goods of fixed assets acquired between October 1st, 2019 and May 31st, 2020: It allows for the instantaneous partial depreciation of the acquisition value of physical goods of fixed assets, as long as they are new or imported and intended for the development of investment projects, in the same fiscal year in which they are acquired. Under this regime, 50% of the value of the asset can be depreciated instantaneously, while the remaining 50% can be subject to accelerated depreciation. if such assets are used or installed in the Araucanía Region, the instantaneous depreciation of 100% of their value is allowed.
- Physical goods of fixed assets and intangible assets acquired between June 1st, 2020 and December 31st, 2022: It allows for the instantaneous total depreciation of the value of physical goods of fixed assets as long as they are new or imported, in the same fiscal year in which they are purchased and without the need for them to have a specific purpose.
Likewise, it also allows applying instantaneous total depreciation of intangible assets (industrial property rights, intellectual property rights and a new protected plant variety) in the same fiscal year in which they are acquired as long as they are related to the interest, development or maintenance of the company or business.
To determine whether an asset qualifies for one of these regimes, it is necessary to verify that its acquisition took place within the indicated periods and that the requirements of each of the alternatives are met.
Other noteworthy measures of this new Law are:
- The transitory reduction of the First Category Tax to a 10% rate for companies in the Propyme Regime with respect to income received or accrued during the fiscal years 2020, 2021 and 2022. Additionally, the monthly provisional payments rate for these companies was reduced in half starting from the declaration and payment that should take place in November 2020.
- The payment release of the tax for regional development established in the Tax Modernization Law for investment projects or their extensions as long as they are submitted to an environmental impact assessment. This benefit will remain in place until December 31st, 2021, and the execution of the project or activity must commence during a period of three years starting from the notification of the resolution of a favorable environmental assessment.